Thanks to a plethora of new data sources, companies can understand customers better than ever before and conduct highly targeted marketing campaigns to engage them. But while this data explosion has helped businesses, it has promoted debate around whether it’s viable to remain so personalised in an age of privacy.
The General Data Protection Regulation (GDPR), a new EU law coming into effect in May 2018, is a direct result of this debate. GDPR has been designed to give individuals power over their personal information and make organisations more transparent when it comes to processing this data. By putting the customer at the heart of marketing and ensuring that businesses are working in a secure and legitimate manner, the new rules are fundamentally a good thing for businesses and consumers alike.
The question is: how can businesses remain personalised in an age of privacy?
Under the new rules, individuals will have the right to be informed how their data is used, the right to object and the right to be forgotten. In addition to this, draft guidance issued by theInformation Commissioner’s Office (ICO) earlier this month reinforced the high standards set by the GDPR around consent. This is the permission given by an individual to allow the processing of their personal data.
GDPR requires all organisations to obtain consent in order to process and use any personal information – pre-ticked opt-in boxes will no longer be considered valid. Instead, businesses will be required to obtain consent with active opt-in protocols, having provided granular details into how the data will be used upfront. Consent requests cannot be tied up in other terms and conditions or be a precondition of signing up to a service. And for each type of communication method being proposed, consumers must be given separate consent options so they can pick and choose what ones they do and do not agree to.
Which businesses will be most affected?
Some businesses will have little difficulty obtaining customer consent in the wake of the GDPR. After all, consumers have no issue sharing data with trusted brands that have proved reliable and trustworthy over time. In the case of Sainsbury’s, for example, customers are happy to divulge data in order to receive tailored deals on their Nectar card. The perceived value exchange in this instance is considered worthwhile.
On the other hand, some businesses will view the GDPR with trepidation, finding it more challenging to obtain the much-needed consent that underpins relationships with customers. Less trusted industries, such as financial services, may struggle. Banks have been hit by a number of cyber security scandals in recent years which have weakened customer trust. The insurance industry is also viewed with caution and is a sector that customers only want to engage with when absolutely necessary. There is often very little desire to be contacted by these kinds of providers.
Overcoming the challenge of sourcing data consent
If you wan to remain personalised in an age of privacy, there are a number of ways to overcome the inevitable challenge of sourcing consent. By analysing and segmenting existing customers, businesses can begin conducting highly-targeted marketing campaigns around consent in the run up to GDPR.
Each customer segment identified through data analysis will have a unique relationship with a business, determined by various factors such as individual lifestyle characteristics, attitudes, buying behaviour and communication preferences. Analysing these attributes will enable bosses to build a clear picture of who their customers are, and understand how best to persuade them of the data value exchange. By conducting this analysis, companies will also be determining which customers are most valuable and who are not worth investing time and money in retaining.
Whilst GDPR does present somewhat of a business challenge in the case of remaining personalised in an age of privacy, it is a long overdue and necessary way of building and maintaining vital customer trust. Businesses should embrace privacy as a driver of profit and learn to be more creative in the marketing approach.
It is pointless investing in consumers unwilling to engage with your brand, therefore GDPR should be seen as an opportunity to re-evaluate marketing practices and realise that it is about quality of customer connections, not quantity. The customers that choose to share data consent will be more valuable and the relationship will be based on clear, strong foundations, which can only be a good thing.
Scott Logie is customer engagement director at REaD Group
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